What is an appurtenance to a vessel?
What is an appurtenance to a vessel?
By: Claudia Carrizales
Edited by: Brooke E. Michiels
Malin Int'l Ship Repair & Drydock, Inc. v. Modu Prospector, No. 3:13-CV-0039, 2015 U.S. Dist. LEXIS 143220 (S.D. Tex. Oct. 20, 2015).
A United States District Court for the Southern District of Texas was recently asked to decide who rightfully owned two cranes that were removed from a mobile offshore drilling unit, that was sold at auction to satisfy a maritime lien. The issue was whether the sale of the vessel the PROSPECTOR at auction included the cranes as “appurtenances to a vessel.” Resolution of the issue was dependent on which party’s definition of “appurtenance” the court chose to accept. The district court judge found that there existed genuine issues of material fact for both parties, and denied both motions.The dispute stems from the sale of a vessel at a Marshal’s auction for enforcement of a maritime lien by Malin International Ship and Drydock (“Malin” herein), for payment owed by PRC Environmental (“PRC” herein) on the repairs Malin made to their vessel, the PROSPECTOR. PRC originally rented the two cranes from the intervenor, Maxim Crane Works (Maxim), with the understanding that the cranes were not to leave PRC’s possession and control. Nevertheless, the cranes were attached to the PROSPECTOR when the vessel arrived at Malin’s facilities. According to Malin, the condition of the PROSPECTOR was “generally unsafe “ and even after repairs were attempted, the PROSPECTOR remained “far from being a seafaring vessel.”Prior to the sale, attempts were made to notify Maxim that its cranes were attached to the arrested vessel and in Malin’s possession. After the sale, Malin’s representatives requested that PRC remove the equipment it had rented, because Malin had no desire to “take over the rental on any of this equipment.” Maxim did not respond to these notices until a year later, when it intervened in the litigation.In its motion for summary judgment, Malin asserted that the lien attached to every component of the PROSPECTOR, including the cranes as appurtenances. Malin relied on jurisprudence that roughly defined appurtenance based on how integral the attachment was to the service of the vessel. Under this reasoning, Malin argued they acquired ownership of the cranes through the judicial sale of the PROSPECTOR, because the PROSPECTOR lost its original cranes at some point in its lifetime, and was functionally impaired without the attached cranes.Conversely, Maxim argued that the Marshal’s sale did not include the cranes. Maxim relied on Fifth Circuit jurisprudence, which provided that ownership of leased property is only transferred with the sale of a vessel when the lessor intended for its property to become part of the vessel. Malin maintained that the cranes were essential to the operation of the vessel and that Maxim conflated “the auction of a vessel after foreclosure of a preferred ship's mortgage with the auction of a vessel after its arrest and execution of a maritime lien.”Although both legal arguments potentially had merit, the evidence offered by either party was insufficient to support either, for purposes of granting summary judgment. First, Malin’s argument that the cranes were appurtenances necessary to the operations of the vessel was doubtful, because the evidence indicated that the PROSPECTOR was basically useless. Indeed, Malin destroyed the PROSPECTOR and sold the scrap, leaving room to question what operational purpose, if any, the PROSPECTOR served at the time of the auction.Maxim’s argument was equally problematic. The failure to retrieve the cranes prior to the sale, and the delayed response to the litigation, seemed to evidence intent to allow the cranes to remain attached to the vessel and in Malin’s possession, in direct contradiction to their argument that appurtenances should be defined in terms of the lessor’s intent. Thus, summary judgment was denied both parties.
